Transcription
All right, if you're ready to start your non-profit, this is the only video you will need. All right, I've been a non-profit founder for the last 10 years, or as social entrepreneurs, what I really prefer to call myself, and I like to call my business a social impact business. Okay, because we are still businesses. So before you even start this journey, let's talk about why you should start a non-profit and if it's really right for you, and then we'll get into the steps of what you need to do to actually start your non-profit.
Now, I wanted to kind of recreate this video because I did one a few years back, and now I have over 200 videos on my channel, so I thought I would start to kind of make this a little bit easier and put them, put some of my videos in order so that you can just run through those and see what it's all about. So let's start your non-profit.
Now, before I get started, I do want to let you know that I have a course that helps you get your non-profit up and running. Um, it's a Start Your Non-Profit in 30 Days course called the Unleash Your Purpose course, and in today's video, I'm going to run through a lot of the things that I do teach in there so that if you want to do it yourself, at least you kind of have like the steps to go through to do that. And if you decide at the end of this video that actually, you know what, I want Ashley to walk me through every single step, and um, I can totally do that for you, and you can find the entire course on Ashleytate.com. There are obviously some templates in there that you can use, and there's a lot of resources in there that I give to you. I walk you through the entire filing process, all of that. So if you get through this and you're like, "You know what, this was great, but I still would like just a little bit more step-by-step," then you can go purchase that course if you'd like. It's fifty dollars, um, and I think it's super helpful. We've gotten probably over a couple hundred people in, in that course, and they've gone through and gotten their 501c3, so it works. That's all I'm trying to say; the proof is in the pudding.
Now, let's move, move into, should you start a non-profit? So a lot of times I will coach people, and I will get clients who say, "Hey, I'm not really sure if I should be a for-profit or non-profit," and what it really comes down to is you can always make social impact whether you are a for-profit or non-profit. Okay, so what a non-profit allows you to do is receive donations. It really is how you're going to receive the funding that really decides which way you need to go. So you can be a sole proprietor, and you can give money back to something, like you can donate to something, or you can, um, give discounts and whatever to people that you want to help or people that might need the help. There's lots of ways you can do it as a for-profit, and I have a whole different video on that, so to help you decide if you should be a for-profit or non-profit. But if you are choosing to be a non-profit, it really should be because you have a truly charitable reason for starting this business. So a charitable reason might be, "I want to feed the homeless," or "I want to help kids get into extracurriculars," or, um, "I want to start a free baseball program for our local youth." Like, there could be lots of different reasons. "I want to get into helping kids," "I want to help human trafficking survivors." There's lots of different things that might be purely charitable, and so you want to look at, is this purely charitable, and ask yourself that question. And I have a few questions I ask when I get on a call to make sure that this is exactly what people want to do because I don't want you to start a non-profit if you really are just trying to find a way to make money, but you think you can do it from getting grants and not, and, and donors. Um, that's not a reason to start a non-profit, and I've had so many people, I've talked so many people out of that because they're like, "Oh, I think it's kind of charitable, and maybe I should anyway." Okay, I will get off my soapbox, but the point is is that, um, really decide which way you want to go. You're here because you've already decided that you want to do a non-profit. I just wanted to make sure I just added a little extra insurance that that's what you want to do.
So I'm going to be looking down at my notes so that I can make sure that I am staying on track with you guys. Um, so the next thing I would say as a big, big, big piece of advice, okay, is start to write down your ideal process of how you want your non-profit to run, because you don't want to start something and try to go find a board and you don't really know or have a vision of your own of how this non-profit will run. Another reason that this is a great way to start the process of starting a non-profit is because it allows you to easily share with others what you're trying to do, and when people tell you their advice or they give you suggestions, you can really look at that objectively, like, "Is this actually the direction I want to take it? Does this fit in with my ultimate vision? Does this still accomplish the mission?" and things like that.
So that brings me into step one for creating a non-profit. The first step is, what is your mission and vision? Um, it is the first thing I have people in the group talk about and share with others because you really want people to look at your mission and look at your vision and see, "Does it make sense?" So let's break this down really quick. Your vision is something that is the long-term, what would actually close down your business, and we want to close down our businesses if we're non-profits. So something that would close down a business for someone who wants to feed the homeless is to end home, end world hunger, or something like that. That might be something that in hunger, um, uh, that's what they call it, um, there's a term that they use, but basically in hunger in our city of whatever the city is, right? And so it can be something a little bit smaller; it doesn't have to be world hunger, but a vision is really, really far, you're thinking really far into the future, and you're trying to see how you can close down your business. That's the best way I can explain it because a vision is something that, like, for my vision, my vision is that we want to make it so that every child has access to extracurriculars, whether that's through lobbying the government or it's through our program specifically. I don't care how it happens, but every child should have access to extracurriculars in my opinion. And so when you're starting a non-profit, you obviously see a problem that you want to fix, and you want to be able to use this as a way to fix it. Okay, so that's your vision. Now your mission, the mission is what you do every day. We help kids get into extracurricular activities, um, by crowdfunding campaigns, by using crowdfunding campaigns, and so on and so forth. So for you, if you're looking at how do we do our mission, you might end, um, you might focus on feeding the homeless through, um, a, a free cafeteria or something. Let's just say you do something like that, right? And so you're writing exactly what you do in your mission because a lot of people get those two mixed up, mission, revision. So it's really the same thing; it's not, I mean, oh my God, it's not, a lot of people get those two things mixed up, and they're very different, and they need to be very clear, um, and your vision can be a little bit longer, but your mission should be very concise, maybe like two sentences or so.
Number two, choose a name and reserve that name. So choose your name. I'm going to be very straight up with you on this; a lot of people get stuck on their name. I give you guys like one day to choose your name because your name becomes whatever your brand makes it. Okay, so if your name is Sunshine and Rainbows, and you feed the homeless, that's what you do, right? Like your brand and what you show to your clients and to your donors and your board members, it's what you do. Okay, so don't get stuck on the name. Make a name. I do always recommend kind of giving some idea, like if you say like some idea of what you do. So Sunshine and Rainbows for the homeless would be great, or Sunshine and Rainbows, you know, for cats, whatever it is that you do if you have a cat sanctuary. But remember that people are gonna find out about you by some other form in your brand strategy that they are looking for. Okay, so don't get too stuck on the name. Find a name. Reserve that name. You can even reserve a few names. Those names are reserved for 60 days, and you can go to, um, I have the link down below where you can go to actually file your name, um, and reserve it, and it's again, it's only reserved for 60 days, so it's really important to keep moving forward as you start this process.
Okay, so the next thing is not really a, a number, it's not really a step, but it's something that you should do kind of around this time. So you want to set up a non-profit binder, and what this allows you to do is as your non-profit grows and as you get all of this paperwork that we're about to start getting into as I go through the following steps, you're going to want to start putting this paperwork inside of one place. So have a non-profit binder. This will be where you keep your EIN number, where you keep your articles, where you do your buy, like you're going to keep everything in there for your business because you're actually creating a corporation. So you want to start having one spot for that corporation so that you can always refer back to them because you will need some of these numbers that you get from like the stay from the IRS, um, things like that, you're, you'll need the numbers. Okay, trust me. So put them all in this non-profit binder, you're good to go.
All right, step three. Step three is to start recruiting your board members, and the reason you want to start recruiting them now is because you can be working on other things while you are waiting for answers back from your board members. So send out that email now. Inside the course, I do have a whole template for you guys to use to send out that email and how to, um, you know, follow up with them and all of that, but for the sake of this video and time, since I'm already at 10 minutes or so, um, we want to just make sure you guys, you guys write a nice email to the board members of your choice that you're trying to ask and, um, and see if you can get your board members lined up now. Now it'll depend on your state how many board members you need, but generally it's about three to five, and I really love five board members. I think it's a perfect amount of board members. Um, having an odd number is great, so three, five, seven, somewhere around there is really good. Uh, seven obviously will give you a better chance of a quorum. Uh, five is so manageable and just so much fun to brainstorm with and grow the organization with and really just start. Um, three is okay; three is okay; it's not bad, but three is, um, it's very, very small, um, and I don't know if you get enough, but if you're in a pinch and you only have three, go with those three.
Number four, what type of year do you want to run on? Now you need to figure out if you want to be in a fiscal year or you want to be on a calendar year, and what this is is basically how you, um, will follow your taxes, how you run your full year. So let's just say like for us, we run on a school year, so generally we are done with everything that we're doing by about May, so our school, our year ends on June 30th and begins July 1st. That means we are on a fiscal year, so from July 1st to June 30th. Now you can have a fiscal year basically anytime during the year, but that's the most common one that people know. July 1st to June 30th is how your year runs, or you're on a calendar year, and the calendar year would begin from January to December. One thing I want to add on to this calendar and fiscal year is deciding your strategic meeting date, so, um, or your annual meeting date. So basically this is going to be the date that if you're going to have some sort of annual meeting inside of your non-profit for your board members or for you to invite people to see what's going on with your organization or anything like that, and you want to decide when that's going to be as well. So generally it's somewhere, it could be in the middle of your year, it could be at the very beginning of your year, it just needs to be decided. So for ours, we generally have this in February, and, um, for other people, it's in August. Even if it's on a fiscal year, it could be for your closeout meeting, it could be for your beginning meeting, it could be the mid-year meeting; it doesn't matter, you just need to decide a date.
Number five is your Articles of Incorporation. Now people tend to get very nervous about their Articles of Incorporation, which I'm not really sure why. I mean, there are templates out there that you can use. I have a template for you inside of the course as well, um, and then I walk you through what all of the Articles mean and, you know, whether you need to have it for your state or not, um, so the Articles of Incorporation. One thing I want to say about this is the Articles of Incorporation can be written from scratch and then turned in for some states, or your state can have a state website where you go on and you fill out the Articles of Incorporation, and basically it's a, um, it's kind of like a template already. I think Florida has something like this, and so you can just go on there, and you can fill out the Articles of Incorporation right on there. But for everyone else who needs to fill it out from scratch, you need to have your Articles of Incorporation in addition to a cover letter, and then when you send it in to the Secretary of State, you also need to have a, I believe, a 35-dollar fee. So you want to make sure that you have all of those things. Okay.
Number six, so number six is to get your EIN number. Now your EIN number is basically like the social security number for your business. Okay, you're gonna have to know, you don't have to know the EIN number like you don't have to know it off the top of your head, but you need to know where to find it, and that's why it goes right into your non-profit binder. So make sure you grab your EIN number from irs.gov. It is completely free, and you just need to make sure that when you get it, you print it off and then put it inside your non-profit binder. So that's about it; that's a super easy step.
So depending on your county and your state, um, this really does depend on your county, but you're going to need a fictitious business name if you're not using your name inside of the business, just like you would if you're a sole proprietor. If you're not using your name in the business, like Ashley Tate Loves Kids or something like that, um, then you need to go get a fictitious business name, and, uh, you'll also probably need a business license, but you can call up your county clerk, and you can find out if you are required as a non-profit to have a fictitious business name and/or a business license.
Number eight is to decide your board roles. So hopefully you've already found your board members, and now you're just looking for the board rules. Now there are three main board rules that you must have. Again, remember the number three because of the actual, um, number of the minimum number of board members you have to have. I could not even get that out, you guys. Okay, the minimum number of board members that you have to have is three. So the board roles that they would have are president or chair, secretary, and treasurer. Those are the main three roles that your board is going to have to have and required to be filled in from the IRS. Now everybody else that's on your board, if you have five, you would have two director, two board of directors at large, and everybody else after that is a director at large. So you just want to make sure that you have those three board roles filled. One of them will likely be you, maybe as the president, and then you find a secretary and you find a treasurer. So generally the secretary is going to be someone who's going to take notes and things like that, and the treasurer is going to be someone who's going to be focused on the money and making sure that your fiduciary, uh, things are all in order, you know, so you want to make sure all of that is there.
Number nine, so number nine is all about your bylaws. Now people freak out over the bylaws, but I want to just say, don't freak out over the bylaws; it's really not that serious. Um, again, if you go through my course, I have a whole template for you to use on that, but the bylaws are not something that you actually need to stress over. All this is is basically how your organization is going to run, like what happens in, how does the board run? Is the board compensated? Um, you know, when are your meetings held? Things like that go into your bylaws, and you might be able to find templates online as well, and so don't worry about your bylaws. The one thing I want you to understand about your bylaws is that no one sees your bylaws; these are specifically for your organization only. So these are organization-centered. Okay, it's not like you're sending these off somewhere; it's just for your organization to approve. Once you're, uh, 501c3 status comes in and you have your first board meeting, the first thing you want to do is approve those bylaws, so make sure you have that and you are good to go. Now the one thing about the, I feel like they give you a lot of leeway, but I tell people in my course to make sure that they do the bylaws right now because once your organization gets going, you might forget to do this. So you do have 27 months, let me say that again for you, 27 months, two years, to actually go ahead and vote on your bylaws before there's any issue or anything, but I would not recommend doing that because once your organization gets up and running, you might forget. So just do your bylaws now, do it at your first meeting and be done with it.
Okay, so the last thing that you'll be doing is the 1023. Now the thing I want to say about the 1023 easy, and that is the one that I would recommend for most non-profits, unless you've already been making money or you have a grant that's coming down in the next year or two that's going to give you 50,000 or more, um, I would go with the 1023 easy. If you have 50,000 dollars or more that's coming your way or that you might make in the next two years, then you should go for the full 1023. Now the 1023, I would recommend really filling out with a lawyer. If you're doing the 1023 easy, you can do that yourself, um, and again, I hate to keep saying it, but inside of the course, I do have a full tutorial on how to fill that out. We go step-by-step on what to do, um, and so before you get started on the 1023 easy, I would recommend, uh, downloading the IRS eligibility worksheet so that you can actually just walk through that with them and make sure that you have everything you need before you sit down to do this because when you sit down to do the 1023 easy, they, they are ready for you to pay at that time, so you can't like go back, you can't save it or anything like that. You just sit down, you, you fill out the form, you pay the payment, and then you're done. And when I say you're done, you are done.
Then you just wait for your paperwork to come back to say that your your exempt organization is approved, and now you are considered a non-profit exempt organization.
And one thing you also want to know about the 1023 is that the price has gone down significantly, and it is now 275 dollars as of the last time I've checked. So I may have gone down even more, but it's 275 when you are on there, and you have to start, and you have to pay. So I just want to make sure I let you know like kind of what the price range is, and overall, like paying out everything in this, you kind of end up way underneath 500. I would even say like that's stretching it to go under 500.
So a lot of people in the program have been getting theirs back in like four weeks, so I was really stunned by that because I always let people know like it might take six months. But whenever you actually do file, just know that this will be retroactive according to the IRS; at least mine was. When I did it, it was retroactive for six months, so any donations that I got during that period I could say that they were tax deductible if they were given in that six months, or tax exempt—yeah, tax deductible in those six months. So just keep that in mind; that's all you need to do.
So for today's video, that is pretty much it. If you go through those 10 steps, you will be fully ready to start your non-profit and ready to rock.
One thing I do want to say, even though I have a course and I have all these things that will help you get through, you can do this by yourself. You can get through this by yourself. Okay, this is just if you want to streamline and go quickly and not have to like read through everything and like make sure you missed a step or all those things. That was a lot of those were a lot of the reasons that I actually created the course. Um, that's an option for you, but I'm telling you also even before I had this course, I would tell people you can get through this, and you can do it. Okay, so just follow the steps, and you can do every single step of it.
So if you are interested in the course, you can find it at ashleytate.com. I also have a follow-up course that talks about sustainability and really creating a brand and for your business and how to create a brand strategy so that you can find more people and attract them to your organization. So as you move into the building phase after you've done the starting up stuff, you'll see that this is one of the pieces that um you might want to add in.
So anyway, you can find everything at ashleytate.com, and um I hope you sign up for the tribe, and then you'll be on my newsletter, and I can talk to you about all of these types of things inside of the newsletter. And um, so that's it for today. Thank you guys so much for watching. I hope it helps. Get out there and let me share something amazing. Bye [Music]